358 F.

3d 16

Michele GRISPINO; Frances Grispino, Plaintiffs, Appellants,

v.
NEW ENGLAND MUTUAL LIFE INSURANCE CO.;
Creative Financial Group; John F. Mazzola, Defendants,
Appellees.
No. 03-1899.

United States Court of Appeals, First Circuit.

Submitted December 18, 2003.
Decided February 6, 2004.

Rudolph J. DiMassa and DiMassa Associates Ltd. were on brief for

appellants.
Peter S. Terris, Ruth T. Dowling, Marc J. Goldstein, and Palmer & Dodge
were on brief for appellees.
Before BOUDIN, Chief Judge, LOURIE, * Circuit Judge, and LYNCH,
Circuit Judge.
LYNCH, Circuit Judge.

Michele and Frances Grispino appeal the district court's dismissal of their
action under Pennsylvania state law against the New England Mutual Life
Insurance Company,1 Creative Financial Group, and John F. Mazzola. After
reviewing the record, we affirm.

I.
2

The Grispinos are Pennsylvania residents who purchased life insurance policies
in 1989 from New England Mutual. They came to believe that these policies
were sold to them through deceptive means notably, by falsely representing
that the premiums due under the policies would "vanish" after nine years
and that they were owed damages.

The Grispinos were not alone. As it turns out, others had made similar claims

The Grispinos were not alone. As it turns out, others had made similar claims
against New England Mutual, prompting the Multidistrict Litigation Panel in
1996 to consolidate a national class action against the company in the District
of Massachusetts. On October 4, 2000, the class action was settled, with the
district court judge retaining continuing jurisdiction over any post-settlement
issues. The Grispinos timely opted out of the class settlement and, on October
3, 2001, instituted a civil action against New England Mutual, Creative
Financial Group (the policy issuing agent for New England Mutual in
Pennsylvania), and John F. Mazzola (the Creative Financial Group
representative who sold them their policies) in Pennsylvania state court. The
record does not show why the Grispinos decided to opt out.

Like the federal class action suit, the Grispinos' state court complaint included a
count for violation of the federal Racketeering Influenced and Corrupt
Organizations (RICO) Act, 18 U.S.C. 1961 et seq. Based on this federal
claim, the defendants removed the state court action to the District Court for
Pennsylvania. 28 U.S.C. 1441. They then filed with the district court a motion
to dismiss the complaint on the grounds that most of the claims were barred by
the applicable statutes of limitations and the remaining claim did not state a
cause of action.

Around the same time that they moved to dismiss, the defendants notified the
MDL panel that the case was a potential "tag-along" action under Panel Rule
1.1 and was eligible to be transferred to the District of Massachusetts, where the
original class action was litigated.2 In response, the Grispinos amended their
complaint to withdraw the sole federal claim. They then filed a motion with the
Pennsylvania federal district court to remand the case back to Pennsylvania
state court. Rather than rule on either the Grispinos' motion for remand or the
defendants' motion to dismiss, the Pennsylvania federal court, at the defendants'
request, stayed the proceeding pending a decision from the MDL panel on
whether the case should be transferred to Massachusetts.

On June 26, 2002, the MDL panel ordered the case transferred to the District of
Massachusetts, where it was assigned to the judge who had handled the class
action case. The Grispinos submitted to the MDL panel a motion to vacate the
transfer order, which was denied.

Now in Massachusetts federal court, the Grispinos filed a motion requesting

remand of the case to Pennsylvania federal court or Pennsylvania state court.
On May 20, 2003, the district court denied this motion, explaining that it did
not have authority to transfer or remand the case to Pennsylvania state or
federal court; it could only make a recommendation to the MDL panel on these

issues, and it was not inclined to do so.

8

Having considered the Grispinos' procedural arguments, the district court

turned to the defendants' motion to dismiss, which had originally been filed in
Pennsylvania federal court. The court held that the Grispinos' fraud, negligence
and breach of fiduciary duty claims were barred by the applicable statute of
limitations and that the contract claims were otherwise defective. The one
remaining claim, under the Pennsylvania Unfair Trade Practices and Consumer
Protection Law, was withdrawn by the Grispinos in order to perfect an appeal
from the order of dismissal and the denial of the motion to remand.

II.
9

Our ruling is limited to the issues raised on appeal and the arguments
presented.3 United States v. Berrio-Callejas, 219 F.3d 1, 3 (1st Cir.2000)
(claims not argued on appeal are waived).

10

First, the Grispinos argue that the district court should have granted some form
of a remand order because there was no federal subject matter jurisdiction once
they amended the complaint to delete the federal RICO claim. This argument is
wrong: the dismissal of the only federal claim after removal of an action to
federal court does not by itself deprive the federal court of jurisdiction over the
remaining state claims. See 28 U.S.C. 1367(c) (the district court "may decline
to exercise supplemental jurisdiction over a claim ... if... the district court has
dismissed all claims over which is has original jurisdiction" (emphasis added));
Roche v. John Hancock Mut. Life Ins. Co., 81 F.3d 249, 256-57 (1st Cir.1996)
("In a federal-question case, the termination of the foundational federal claim
does not divest the district court of power to exercise supplemental jurisdiction
but, rather, sets the stage for an exercise of the court's informed discretion.").

11

While the court could easily have concluded that a recommendation for remand
was appropriate in light of the many unsettled questions of Pennsylvania state
law that were presented, our review is only for abuse of discretion. See Cotter v.
City of Boston, 323 F.3d 160, 172 (1st Cir.2003). We find no such abuse of
discretion. The Massachusetts federal court had already handled a large class
action involving the same sorts of claims as this case and had continuing
jurisdiction. Its familiarity provided a sufficient basis for its decision to retain
jurisdiction over the action. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343,
350, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) (relevant factors for determining
whether to retain jurisdiction include judicial economy and procedural
convenience).

12

The Grispinos' next argument is that the district court incorrectly found that
their negligence, fraud, and breach of fiduciary duty claims were time-barred.4
Having concentrated their ammunition on the transfer and remand issue, the
Grispinos pay scant attention to developing this issue; they argue only that their
claims did not accrue until New England Mutual actually terminated their
policy, on May 31, 2000. The district court flatly rejected this argument,
finding that, at the latest, the Grispinos' cause of action accrued in 1998, when
they were still required to make payments on their policy despite the
defendants' earlier representations that the premium would have vanished by
that point. The Grispinos' reassertion, without any supporting authority, that
their cause of action did not accrue until May 2000 borders on frivolous. The
district court's ruling was correct. See In re New England Life Ins. Co. Sales
Practices Litig., 346 F.3d 218, 221-23 (1st Cir.2003) (cause of action accrued
when the plaintiffs received a written notice indicating that their "vanishing
premiums" would not vanish at the end of the anticipated payment period).

13

Before dismissing the Grispinos' fraud, negligence, and fiduciary duty claims,
the district court sua sponte considered and rejected the possibility that the
pendency of the class action tolled the applicable statute of limitations. See Am.
Pipe & Constr. Co. v. Utah, 414 U.S. 538, 553-54, 94 S.Ct. 756, 38 L.Ed.2d
713 (1974). It provided no opportunity for briefing on this issue. Relying on a
Pennsylvania intermediate appellate court decision, Ravitch v.
Pricewaterhouse, 793 A.2d 939 (Pa.Super.2002), the district court concluded
that Pennsylvania law does not provide for the tolling of a state statute of
limitations based on a federal class action. Although the district court was
correct to identify the class action tolling issue, we have considerable doubts
about the soundness of its analysis. For instance, the court overlooked a
consistent line of federal circuit court cases holding that the American Pipe
tolling doctrine applies to plaintiffs who opt out of a class action in federal
district court. See Realmonte v. Reeves, 169 F.3d 1280, 1284 (10th Cir. 1999);
Adams Pub. Sch. Dist. v. Asbestos Corp., 7 F.3d 717, 718 n. 1 (8th Cir.1993);
Tosti v. City of Los Angeles, 754 F.2d 1485, 1488 (9th Cir.1985); Edwards v.
Boeing Vertol Co., 717 F.2d 761, 766 (3d Cir. 1983). The district court also
failed to consider the relevance of the fact that the case had been removed to
federal court from state court in determining how to approach the tolling issue.
And there are significant questions about whether the Pennsylvania Supreme
Court would, in any event, follow the rule announced in Ravitch.

14

We need not reach a conclusion on these issues. Despite the fact that the district
court reached the tolling issue, the Grispinos make no argument on appeal
regarding the class action tolling doctrine specifically, or even tolling more
generally. The argument has been waived. See Berrio-Callejas, 219 F.3d at 3.

15

Intertwined with these arguments is a final assertion by the plaintiffs that they
have been denied due process, equal protection and other constitutional rights.
This frivolous argument is once again premised on the plaintiffs' claim that
there is no federal subject matter jurisdiction. But by pleading a federal cause of
action, the Grispinos' attorney created federal removal jurisdiction, and the
deletion of that claim once the case was in federal court did not deprive that
court of federal jurisdiction.

III.
16

The judgment of the district court dismissing the claims is affirmed. We do so

without approval of its reasoning on the class action tolling doctrine. Costs are
awarded to the defendants.

Notes:
*

Of the United States Court of Appeals for the Federal Circuit, sitting by
designation

New England Mutual merged in August 1996 with Metropolitan Life Insurance
Company, which is the proper defendant in this action. Like the parties, we
refer to the defendant by its former name for clarity and convenience

Rule 1.1 of Procedure of the Judicial Panel on Multidistrict Litigation states, in

relevant part, that "A `tag-along action' refers to a civil action pending in a
district court and involving common questions of fact with actions previously
transferred under [28 U.S.C. 1407]."

A portion of the plaintiffs' brief appears to challenge the MDL panel's decision
to transfer the case to Massachusetts District Court. The language of 28 U.S.C.
1407(e) only permits the court of appeals for the transferee court to review
the MDL panel's transfer decision via the issuance of an extraordinary writ
pursuant to 28 U.S.C. 1651, which the Grispinos have not soughtSee In re
Patenaude, 210 F.3d 135, 140-41 (3d Cir.2000). Regardless of the Grispinos'
failure to bring a mandamus action, the panel's transfer of the case was clearly
within its discretion. On its face, this case appeared to be a tag-along action that
raised issues of fact common to both the class action and the suits that had
already been transferred to Massachusetts. The fact that there were pending
jurisdictional objections did not deprive the MDL panel of the ability to transfer
the case. See In re Ivy, 901 F.2d 7, 9 (2d Cir.1990).

The court also found that no viable contract claim was stated. Plaintiffs have

waived this issue by failing to raise and brief it on appeal